What is a DAO?

Breaking it down

To begin the process of even starting to break down what a DAO might be, we decided to simply gather some of the opinions of those arguably much more qualified to answer that question than we: our community. As expected, the answers were varied, and ranged from people expressing DAOs within a more centralized structure, some people arguing from a more directly democratic structure, and everything in between. But several trends did emerge; important trends that form the core of what could be described as a prelude to a definition:

1. Permissionless participation: The concept that you are free to come and go as a worker and move freely between DAOs.

2. Incentivized governance: The theory of using direct incentives to achieve a democratic outcome.

3. Security of the core structure: The DAO should ultimately be run and managed by interested parties with security structures in place to mitigate destructive mob behavior.

Let's rethink some things

From here we can deduce a few more things, the biggest of which is that the mental model of the DAO as a truly decentralized mesh is largely incorrect. The permissionless nature of work within a DAO (aside from the core founding team) already precludes this idea of “lots of meshes” as it becomes clear: The meshes are all one. Within the construct of a DAO, there are no borders. Instead, there are hubs, corporate centers of core teams surrounding by orbiting workers that come and go with the bonds between them all slimming and thickening as their interest ebbs and flows between the sea of hubs.

The entirety of the DAO ecosystem may be a mesh, but the idea of a singular DAO being a self-contained meshwork of peer to peer thought falls apart. It is key then to realize that in a DAO, those working for you may indeed be taking bounties and incentive work from your very competitors. This changes dynamics within work, a dynamics of corporate relationships. There becomes a vested interest in healthy competition using shared resources rather than all the cloak and dagger of the pre-DAO era.

Really, the shape of a DAO would be more a series of hub and spoke orgs with loose connections between the outer layers of the spokes, a mesh existing at the fringes of the DAO more so than the center around the hub. DAOs are structured circular, but there are clear organizational levels the closer you get to the core teams. This becomes clearer when realized in the forms of representative democracies that are most often desired by the community members directly.

Governing

Governance is usually desired to operate as a funnel where the community has indirect power to effect change from a very low, grassroots level, but also while not having to worry about day to day operations of a company. Representative democracy provides this kind of funnel needed for a DAO to function and while several forms of this exist, the use of it as a general concept is highly encouraged within our gathered data. The community wants a voice: This should be obvious to anyone contemplating a DAO architecture. However, that voice should not be without limit and constraint.

For many, that constraint is often voiced to be some amorphous element that actually “runs” the DAO. For us, this means a core team is necessary and this makes complete sense. After all, the permissionless nature of the DAO means that as workers will come and go there must always be a team of individuals present to ensure the survivability of the company proper.

In conclusion

A DAO then is decentralized, yes, but not wholly so. It maintains a mesh network along its fringes, with loose joiners between other main circular hubs, all orbiting each other and sharing resources. Also, DAOs are autonomous, yes, but that autonomy exists only in as much as the DAO wishes it to exist. The autonomy of a DAO may (or may not) include its execution, but the governance must always involve an interactive component. And DAOs exist as independent entities, organizations, to be run and managed by a core team concerned with the maintenance of the work and goal of the DAO in day to day operation.

In some idealized future companies may simply exist as a series of smart contracts executing the whims of the people that come along and invest their time and money in the idea of the company. “Work” may only consist of voting here and there, making informed choices and conducting tasks for automatically distributed currency. It’s a utopic vision, but not outside the realm of possibility in some distant future perhaps.

GET Protocol isn’t quite there yet, but we think we’ve gotten a very clear concept of what the communities around us expect at this point in the game from a DAO. We’re hoping to encourage other early stage DAOs to take stock of what their communities say when it comes to simple definitions; it can be a really important moment in learning how to structure your DAO in a way the community will love.

More to follow!